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Price action and pattern trading

  • #61
  • Jan 20, 2016 5:00am Jan 20, 2016 5:00am
Quoting DemoAntares
{quote} Same here - I like to toss a glance to it occasionally but in general if it is a correct trade - for me it's either triggered stop loss or achieved profit target. No inbetween. Of course, profit targets are reasonable and always consist of taking the profit on the closest support/resist. Here's another example of the trade I took yesterday. {image}
You are right. My problem has always been setting a TP and SL. I really have to force myself to set those. I tend to open a trade and it goes in my favor so quick and I am in many pips but I stay in a trade too long and it turns into a loser. Where I am at right now in my trading, I can get in a trade at a precise time and be in pips almost right away but I watch it turn into a loser. I know yesterday I posted a few charts with GBPCHF that I was trying to trade on a 5 minute chart and that was chaotic for me and it was a loser even though it did go the way I wanted it to. ​

Once I figure out that SL and TP perfectly (which I will cause I'm destined to be a forex money maker), my account will grow immensely.
JOHN 3:16
  • #62
  • Jan 20, 2016 5:20am Jan 20, 2016 5:20am
Quoting renasdad
{quote} You are right. My problem has always been setting a TP and SL. I really have to force myself to set those. I tend to open a trade and it goes in my favor so quick and I am in many pips but I stay in a trade too long and it turns into a loser. Where I am at right now in my trading, I can get in a trade at a precise time and be in pips almost right away but I watch it turn into a loser. I know yesterday I posted a few charts with GBPCHF that I was trying to trade on a 5 minute chart and that was chaotic for me and it was a loser even though...
I already have those predefined (SL and TP) - but it depends of your P/L ratio - I tend to make my trades always with a positive ratio - P has to be larger than L
Stop loss is always 1-2 candles' highs/lows/open/close away. As I shown in Emerson electric chart. By assessing stop loss to be "somewhere there" I usually end up with a negative trade - which also makes it an incorrect one. SL represents the value, which SHOULDN'T be tested in order for your pattern/signal to work. TP represents the closest reasonable support/resistance which you might THINK it will pose a bounce which may reduce your profit.
Ofc depends of timeframe.
  • #63
  • Jan 20, 2016 5:26am Jan 20, 2016 5:26am
One thing I do know it the T should be bigger than the L. One way to help me with TP is Fibonacci, at least I think so. I've been spending a lot of time putting them on charts and seeing where to place them. I totally understand Fibonacci and what its all about, I just need to figure out how to place them correctly. ​
JOHN 3:16
  • #64
  • Jan 20, 2016 5:32am Jan 20, 2016 5:32am
Quoting renasdad
One thing I do know it the T should be bigger than the L. One way to help me with TP is Fibonacci, at least I think so. I've been spending a lot of time putting them on charts and seeing where to place them. I totally understand Fibonacci and what its all about, I just need to figure out how to place them correctly. ​
Use everything you know. But in the end it's all about support/resist. But yeah sometimes it's difficult, specifically in USD/CAD for example - somehow we're in an uncharted territory - that 1.6 top was long time ago...
Fibos should be placed on existing moves, and on new moves - so when some key point levels match (particularly 50%) - it gives a nice awareness of the potential TP. Be careful when matching any other level than 50%. In most cases 68% (or whatever it is) can work nice too as a retrace for the pullback. Also fibos are drawn covering all the prices from the move, not just candle closes. At least that's what I had experience with...but anyway, take many charts and practice.
The way to do it is not to assume in your mind where should next retracement be - but just draw fibos and then assume.
  • #65
  • Jan 20, 2016 5:47am Jan 20, 2016 5:47am
Another way to protect your profit (partially) is to set trailings as soon as you are deep in the green. Trailing will enable you to take profit in 100% of cases - and at the same time they will allow for you to ride the position to max profit. Of course, the more volatile the asset, the more trailings will be "stopped out" - but in general when you get used to it - you're golden.
The biggest problem for traders is the desire to get "a bit more" from the position - and trailings negate exactly that. Trading should be boring - and therefore automated. Predefined SL's/TP's combined with trailing orders which are placed afterwards (depending of the development of the situation) is a god way to achieve that. For example, my short on spx (2063 short), as soon as it was in the green more than 80 points - I entered a trailing order of 50 points large. So any bounce of 50 points would have "stopped me out" - I took profit manually at 1907 points - since that was my second TP (first TP was at 2010 but when it closed below (daily) it I knew there was a high probability of 1900 to be reached.
  • #66
  • Jan 20, 2016 6:29am Jan 20, 2016 6:29am
I have been researching Fibonacci and have attempted to use it in my demo trade account, but I never know where to start with it?
In that I mean where place the first point of the fib pattern on the chart?
I am aware that a lot of traders like this type of trade, where do you know where to place the fib chart though?
  • #67
  • Jan 20, 2016 2:23pm Jan 20, 2016 2:23pm
I closed those trades from yesterday for a very nice profit. I opened trades in the opposite direcrtion​
Attached Image(s) (click to enlarge)
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JOHN 3:16
  • #68
  • Edited 2:31pm Jan 20, 2016 2:30pm | Edited 2:31pm
I figured I would put a couple lines on the chart to show what I noticed before making the trade
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JOHN 3:16
  • #69
  • Jan 20, 2016 5:28pm Jan 20, 2016 5:28pm
Looks like its getting ready to make a move.
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JOHN 3:16
  • #70
  • Jan 20, 2016 6:08pm Jan 20, 2016 6:08pm
Worked good. Learning price action was the best thing I did.​
Attached Image (click to enlarge)
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JOHN 3:16
  • #71
  • Jan 21, 2016 3:35am Jan 21, 2016 3:35am
Very nice decision. Scale it out, or trail it if you can. Let yourself ride the position as much as you can - while at the same time retaining the 100% "possibility" of taking the profit - no matter how large it is.
  • #72
  • Jan 21, 2016 10:34am Jan 21, 2016 10:34am
I'm trying to see good setups in smaller timeframe charts. Adding to and taking from a position is what I have to figure out better than I have done in the past. Once I can master that part of trading, I won't need a job anymore. I can feel it. I will be a successful trader, more than I am right now.​
JOHN 3:16
  • #73
  • Jan 21, 2016 11:59am Jan 21, 2016 11:59am
Quoting renasdad
Worked good. Learning price action was the best thing I did.​ {image}
Glad this worked good for you Ren.
I just don't (at the moment) understand the thinking behind it.
I can see that you have M5 on the screen, and I can see your lines but I cannot work out how you know that the market is going to continue to climb like that?

I look at the trends and they seem to go the opposite way to what I think they are going to go?
I can guarantee that if I had made that trade at the same time, it would have gone the other way!
  • #74
  • Jan 21, 2016 12:07pm Jan 21, 2016 12:07pm
Quoting PrimalScien
{quote} Glad this worked good for you Ren. I just don't (at the moment) understand the thinking behind it. I can see that you have M5 on the screen, and I can see your lines but I cannot work out how you know that the market is going to continue to climb like that? I look at the trends and they seem to go the opposite way to what I think they are going to go? I can guarantee that if I had made that trade at the same time, it would have gone the other way!
LOL dude...I know exactly how you feel. That's how I used to feel. I don't know if its even possible to put in words on paper what I think when I trade. Ever since I started learning about forex, I have spent 1,000 of hours just watching charts and how they act. I don't know if that's what is helping me get my edge or not. History always repeats itself so if I see something happening just like it did "that other time", I know its time to sit up and get ready. ​
JOHN 3:16
  • #75
  • Jan 21, 2016 12:10pm Jan 21, 2016 12:10pm
Depending on what the next couple candles look like, Its about to make another move. If it goes above that top line, it will go up some more. A big drop below that trend line tells me its going to retrace for a while ​
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JOHN 3:16
  • #76
  • Jan 21, 2016 12:12pm Jan 21, 2016 12:12pm
With the way its been acting the last couple days, I would think its going up more but that's where I got burnt many times in the past​...trading what I think and not what I see. But its about ready for me to think about buying a little more very soon
JOHN 3:16
  • #77
  • Jan 21, 2016 12:17pm Jan 21, 2016 12:17pm
Quoting renasdad
With the way its been acting the last couple days, I would think its going up more but that's where I got burnt many times in the past​...trading what I think and not what I see. But its about ready for me to think about buying a little more very soon
Nice Nice!

Yeah thats it, I need to put the hours in and become familiar with its patterns!
  • #78
  • Jan 21, 2016 12:49pm Jan 21, 2016 12:49pm
Here is a good example of trade what you see not what you think. I thought it was going to go up... 5 years ago I would have bought it cause I thought it was going up more. Now, I watched it a see it hasn't gone up yet... Once I see a new pattern forming I will sit up and get ready again.​
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JOHN 3:16
  • #79
  • Jan 21, 2016 12:52pm Jan 21, 2016 12:52pm
Here is what I see now....just waiting. With that newer low, and the longer trend being down, I would consider opening a short trade
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JOHN 3:16
  • #80
  • Jan 21, 2016 1:04pm Jan 21, 2016 1:04pm
Thanks Ren.

So, looking at those patterns now, are you going to buy or sell?
You see, if it was me I would not know what way to go you know? I am still at a stage where I would have to see a big trend, and then go with that trend.
For me I would not be able to decide which way to go?
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